Vishay Intertechnology (VSH) 4 Feb 202019 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Vishay Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

to conference like speaker to now today. will hand over the your I Henrici. Peter sir. Please go ahead

Thank morning With Regina. Chief Vice and Dr. you, President Good Paul, Executive year fourth Vishay Gerald Financial Lipcaman, XXXX quarter Officer Intertechnology's and and conference our President Chief call. Vishay's me Lori are and today, and welcome Executive to Officer.

give call year an will review Paul quarter and XXXX As and results. performance who will of discuss usual, more Vishay's as segment overview CFO, then we'll our business well with the start results Gerald financial today's detail. Dr. operational fourth in as

call time Finally, be approximately for days. section reserve being our publicly webcast answers. the XX for we'll this This of call The is will questions and ir.vishay.com. website available Relations Investor at from for replay

that conference are aware should making performance. forward statements. looking be You events the forward to that in subject These to risks cause certain looking that and we be future uncertainties actual discuss results could statements differ statements from will call today's and

discussion cause the differ and press Commission. see today's filings Form results and Form Securities factors could Vishay's For please release with XX-K Exchange to and that of XX-Q

call by financial be provide. principles. prepared this the should measures that performance refer during conjunction addition, provide information also measures they are useful and use or according we of in businesses considered other about because operating may In non-GAAP with adjusted measures to to We generally we our accounting not that investors accepted GAAP we believe

diluted earnings computation. we variables the Form impact This the various filed that outlines share a morning, X-K per that

find of discussing. fourth XXXX Relations metrics Paul the section financial of information be can the of presentation the some Investor quarter will On operational Dr. containing our website, the you

Now, I to Lipcaman. turn call Financial Chief over Lori Officer, the

reported Good EPS $X.XX and our morning, revenues sure that Peter. Vishay's am some key quarter. will press everyone. chance highlights review for release. $X.XX earnings of of for EPS $XXX to you was focus Adjusted the million. had on quarter. metrics. have I was a for Thank QX I most you, the

During we principal $XX GAAP Also debentures announced of charges will of the we million a and elaborate in $X.XX our related these I transactions reduction July. program cost recognized moments. during convertible loss on quarter, we to the repurchased recorded amount the a few quarter, restructuring in million extinguishment. on US

year. was EPS EPS Operating quarter million, XX.X%. X% by the million by was from million in Adjusted down Revenues and Adjusted operating down prior previous EBITDA was were was X.X%. $X.XX. Gross $X.XX. X.X%. was X.X%. or was was margin $XXX XX.X% compared margin $XX $XX XX.X%. quarter Adjusted margin to EBITDA or

was were compared XX.X%. year was million, $XXX was Adjusted EPS $X.XX. to operating Operating down EBITDA year. margin Gross $X.XX. Adjusted was the $X,XXX in million XX.X%. margin XX.X%. was or prior EPS margin million $XXX by was or X.X%. EBITDA was Revenues XX.X% Adjusted XX.X%.

decreased by negative income negative $XX $XX impact quarter, decrease Volume $X X.X% in mix QX of a versus million to from main equivalent elements prior in Adjusted income QX were, to representing exchange a including prices X.X% operating with sales, million in $XX quarter average ASP XXXX. operating operating had a shift. million $XX million decreased selling The million on excluding rate a Reconciling income volume, million, negative XXXX lower a of million decrease. XXXX to $X prior impact for adjusted quarter, compared or four based impacts. $XX adjusted

QX four income QX to as excluding or XXXX. million XXXX, XXXX $XXX negative $XX expected Fixed items, decreased costs compared income by prior adjusted increased million X operating to impact operating $XXX in to lower of exchange due year immaterial versus based four million with operating rate in income $XX individually a in million adjusted Quarter sales on million Quarter million XXXX, lower from impacts, XXX adjusted

had elements an main X% XX.X% ASP representing $XX decrease. of a impact decline, a representing were, volume of million prices a negative negative average million impact selling $XX The decreased with

the operating income adjusted in from on million sales XXXX. decreased XXXX exchange $XXX full for in XXXX adjusted operating million $XXX operating based the adjusted income compared XXX XXXX, million year, million year For or year $XXX impacts, for rate to lower by the to excluding $XXX lower million income

a million representing with a which costs to variable increased representing customers. were, US wage $XX decrease, by elements tariffs to metal main includes and pass of a decreased prices, of decrease. negative a manufacturing $XXX tariffs $XX selling compensated million Volume for cost and average of prices impact The X.X% are due negative negative had inflation impact million higher impact through ASP X.X% cost primarily Variable US reduction. inefficiencies the other

immaterial $XX Inventory effects quarter due the by measures. items expected lower slightly general impact for million, expenses were higher to primarily have and a administrative Selling individually $X million negative of million. and belt-tightening due general than sequentially to $XX

For rate due excluding expenses general primarily the X.X% belt-tightening to million and versus exchange impacts in lower million compensation was incentive selling year XXXX. measures. $XXX general administrative and $XXX expenses

our approximately $XXX million the expectations are of for million XXXX SG&A year constant full approximately at $XXX QX exchange expenses For and rates.

but earlier cash during million we of $XXX of the net million the additional any know, during repatriate repatriate periods not did $XXX you and XXXX, US did QX to as company approximately taxes taxes of The during XXXX.

amounts income tax and are taxes taxes due tax. Recall US to and finance for these the intercompany been foreign other the some to revolver are no projects taxes. down of amounts reform that to pay while settle withholding tax and have to debt, transition the all Substantially state such they to certain subject to subject utilized expansion longer reform, capital pay federal to

approximately There with of repatriation is for available $XXX additional million earnings taxes accrued.

total of amounts the comprised billion evaluating million liquidity still a $XXX repatriation. had on quarter revolving of facility. credit short-term were are We and Cash and $X.X at We timing end. such investments no outstanding

the longer after is convertible programs we the tax certain million, repurchase at were debentures, this principal amount over outstanding debt undertaken to we able part principle quarter, was instruments. our the $X.XX of past no retire two at amount During convertible remain Of reform. the of the million which have attributes which years the to or the the outstanding This have $XX end of of only efficient XXXX. X% were XXXX debentures that outstanding tax of beginning XXX convertible

We continued or condition, and to by of Board to factors. subject legal additional Directors repurchases open business to requirements transactions market debt and instruments be market privately authorized in negotiated our convertible through other repurchase

and note XXXX. million debentures net the at the million debt amount is million face XXXX Our the due notes due value principle of total convertible costs. comprised of $XXX or the XXXX unamortized convertible issuance related million. and converts to and remaining debt the The value year XXXX The discounts is end $XXX remaining in related issued the and carrying to of $XXX $XX in debentures.

are expires As end reduction revolving of credit Like and principal outstanding a on June, in due to at I revolving until quarter no there give of credit XXXX No four. said, cost program. facility the amounts you overview the XXXX. facility the payments are an

management reduction we by when and implemented to global to annually rejuvenation. As provide $XX lower approximately cost implementing tended are fully million announced costs and in July, programs

which separation successful. strategy early offer, Our been volunteers generally has a to has accept voluntary been retirement seek to

for accepted savings During The expectations. in transition of individuals not the will line to due QX, end the achieve expenses expense expense destruction December offer, we with recognized of fully the to the program cost periods million $XX when the $XX recorded was million bringing applicable XXXX. total until

year on GAAP basis a effective tax rate XX%. was full The

consider and full deferred for taxes year measure to adjustments that of includes QX, million foreign rate corporate $XX.X adjustments certain as a million impact such program, related These XXXX. and tax to GAAP the effects, repatriation. for Our were the activities repatriation $X.X reorganizational to benefit currency

settlement convertible year intercompany benefit loan deemed full $X.X the expense and of gains The the GAAP to of tax uncertain QX a recorded an resulting previously exchange provisions basis, includes tax to in adjustments related some of the payment tax tax permanent foreign Our tax from rate QX. dentures million. on unusual also in approximately the

negative, rate U.S. on tax for the QX effective is unusual Because the income. tax of benefit items, tax a GAAP pre-tax

effects rate The normalized excludes unusual rate XX% year-to-date as year approximately was at the early tax Our the debt tax tax full XX% tax of as QX. the well an the extinguishment. normalized for versus these items, restructuring

a pretax earnings Mathematically, low normalized up XX% of in was tax rate QX, this yield cumulative QX. and catch for impacted the by

We expect XXXX normalized effective our to XX%. for rate XX% tax be to approximately

the the evaluate BEAT provisions of to the continue and We tax aspects particularly taxes. law, US GILTI of

quarter of share on assumed at of the shares could an EPS different $XXX effective and jurisdictions. mix year for million. for first purposes approximately among taxing expected is level in The income Our A million. our tax outstanding $XXX results. Total shift count significantly result various income in XXXX were based is end consolidated rate

variables GAAP EPS please Annual morning. to that US segment These share in alignment. For the data new annual the In impact this XX-K report of explanation filed a and Form full and X-K to combined. Report disclose were reflect our calculation, segments change we on two be will refer to inductors will we presented reporting count our our this resistors. separately Prior period previously recast the

filed will this the inductors on year resistors. this XXXX and also morning we period a discuss quarter few recast data. includes separately a of summary moments, also comments Dr The in Paul's X-K the and prior

the the quarter million, were quarter reduction business Capital were $XX the $XX $XX was approximately million, $XXX for year expenditures operations from for $XX for expansion of million. for $XXX split million. $XX million, from million, cash Cash quarter million maintenance operations for cash Capital million. was was for for the free cost $XX expenditures

generated than These for cash $XXX $XX million taxes generation XX million operations The the million. to flows paid cash includes consistently each year the $XXX million. last million for of past US the from Free cash $XX excess now in reform and shares tax related now years $XX greater and years. $XXX was XX million cash repatriation an year

quarter was rate approximately historical quarter-over-quarter of impacts, months. end end decreased of at the sales the at our four $XXX to compared excluding was quarter high Inventory -- or the million million months $XX still is average three X.X by of Backlog exchange

for were outstanding cycle days of cash outstanding the in of sales for XX outstanding inventory resulting days, a days, days. XXX quarter conversion the were of of quarter payables days XX Days XX days, was

call turn Officer, will our Chief Gerald Dr. the we to Paul. Now Executive over

it's business is inflated and strong were a of of Volumes has the supply up the been profitability. years morning vis a drastically quite XXXX had an Thank reduced Vishay a and the consequence required particular negative of our volumes strong vis Electronic in XXXX everybody. for you, XXXX correction. a impact year general good on reduction inventory levels sharply manufacturing in in components as Furthermore, chain. for the Lori,

manufacturing from and inefficiencies were coming temporary quickly adaptation Additionally, the there massively. of capacities downward

XXXX. $X.XX in versus in excellent level. GAAP cash The year sales generated which adjusted last XX% XXXX Vishay also of of per And per GAAP $X.XX XX% generation of cash in a a versus in The of XX% paid sales achieved versus on of versus adjusted XXXX quite XX% $XXX in includes XX% margin of and XXXX. earnings in sales repatriation share $X.XX of remained year. cash of margin free of in prior of of earnings operating of gross for million, $XX $X.XX XXXX. share free margin sales taxes versus XX% We XXXX operating million.

rates. anticipated than Quarter disappointing. mix rate other singularities margin. due lower income a negative expected than product our led higher four quarter. was fourth exchange various an was lower variable been in of contributive also XXXX unfavorable of costs, for to Furthermore, impact has normalized normal tax clearly impacting than to And The and

fourth the adjusted GAAP earnings X% in per X% per quarter margin of of operating sales, share Vishay of $X.XX. gross of of sales, $X.XX share of of margin XX% and of achieved adjusted sales, a operating margin GAAP earnings

reduced XXXX about but driven economic the reduction substantially, our distribution, talk industry the lead times of most in by also concerned chain. This economic of the deteriorated course and the inventories. normalization OEMs subsequent conditions The me supply environment. Let for the inventory part in major very the for

substantially course political much of an in The the XXXX year. normalize slowdown burden Backlogs, below into automotive book-to-bill XXXX inflated continued and of last and in developed additional the course ongoing with X. worldwide turbulences to in ratio's

have the point products the of Recently, low we substantial Considering increasing orders of quarter, inventories for from to strong the cancellations the this a represented slowdown do we reduction that recovery during the orders. decline. chain of correction. and quarter believe supply another fourth in commodity see of distribution, quarter also of phase Selling prices order in fourth restarted the

were OEMs Inventory the talk Sales remains to aviation concerned, well as our off market industrial is being of automotive about are burnt robust the Let remain the a markets me where as strong and POS regions. stable After and year, overall. by weakening, distribution military softened American fourth quarter. in distributors. spending as commercial

be by The European in the industrial supply in segments. of in Asia, to automotive too continues a the of see destocking the as EMS in particular by we improvement Despite of business market. weakening high diesel chain inventories and burnt and the the stabilization automotive well as the signs of continued

expected any evolving setting levels, corona aside to is normal of business first, fact, in Asia course. the to return crisis impacts off more

in the quarter Talking about distribution by year for down by way prior the Nevertheless, down expected. and was declined versus quarter Asia by XX% fourth than XXXX quarter in million. distribution, year geographic versus $XX in QX by versus weaker was down down during again of below and inventories down X%, POS in fourth year. Americas the the POS prior a came by X%, by ended was global XXXX the distribution It in POS noticeable all X% XX%. XX%, weak in regions full XXXX Europe

We turns to expect turns third The to in maybe quarter, X.X is this compared turns in X.X first at year. turns the in was in in a quarter X.X remained of prior the lesser and year. first There quarter. to also X.X distribution in no trend inventory X.X decline further extent the showed Americas prior after continue

X.X Asia after turns Asian in distribution in turns X.X prior -- X.X and QX showed year. also turns

and fourth X.X picked prior Orders which turns up Europe all QX, X.X quarter X.X year. the in turns naturally had confidence. some after substantially, gives distribution, in from regions turns also in

supply quarter on improvements Nevertheless, in for comment to resistance This by technologies. in in political segments. first worldwide Let weakness vehicle a production we me or in cars. high automotive the be to problem industry industrial one in chain show and segment Europe, the two continued in growth, the remain carried traditional but there's particular diesel expect continues for inventories quarters. The to

a power Basically gas in positive consumer to expected automation, set . industrial metering quarter positive. by and driven devices strong also developments, is In and robotics, oil transmission, existing be conditioning and goods smart air XXXX white

to course strength to Playstation growth in for launch of driven XXXX military year XXXX. Gaming XG ongoing the by new starting of year, should be strong sectors, be a in due is the the see expected in this growth continues and service. Sony of strong better computing the in opportunity medical there's a to major

talk of came me guidance. business slightly development about four quarter Let exchange sales, excluding Vishay's our rate in impacts above midpoint the

in The achieved million in sales prior of versus year. $XXX quarter and $XXX prior million versus million $XXX

million, effects, were by the excluding in prior versus at or in rate by rate by quarter effects. prior $XXX $X,XXX versus exchange XXXX, down million Excluding down a X% $XX million versus XXXX million, sales in or Sales year year XX% and of $X,XXX were XX%. decrease QX exchange

X.XX recovered fourth distribution. from driven the X.XX quarter third in the by Book-to-bill quarter, mainly in

Europe Asia X.XX quarter. X.XX QX now X.XX, third X.XX. quarter, in stable relates quite substantially month, for passives. for were X.XX for for X.XX third X.XX the X.XX have level. passives to for Americas quarter X.XX. after $X.XX X.XX actives in the in X.X OEMs after X.XX the for X.XX in book-to-bill they in and normal reduced fourth actives was the Cancellations a to after book-to-bill X.X after the the Backlog the QX. and which at in in after of detail Some QX. distribution after

highest semiconductors decline X.X% and commodities had price to prior be specialty minus versus Actives share rates. also prior X% versus passives be The hit and prior stronger year. decline minus of to price The quarter We with as quarter, is price X.X% expected year. highest decline back decline historical versus prior minus quarter, share the year. at minus price of minus prior the versus X.X% minus versus and products X.X% X.X% prior versus

reduction margin In on able inefficiencies comments the negative innovation. costs. temporary In adaptation, offset due plant the were completely of variable operations. not by to we capacity by normal the contributive XXXX, Some cost year burnt to on the impacts particular and

costs rate lower came or effects. constant excluding were year at the below QX exchange $XX prior in million, $XXX million, when year X% due expectations incentive compensation. SG&A slightly in costs ex mainly below to for SG&A million $XX at rates, XXXX

Manufacturing for above higher million, costs above $XXX fixed the exchange costs X% at $X year came were by Manufacturing the prior depreciation. above in year our million, slightly quarter naturally $XXX million rates fourth in fixed maybe impacted expectations. constant XXXX, or million $XX at

X% the down prior a when broad of of the XXXX year, this capacity which Total XX,XXX, was we end of course XX,XXX reduction. employment were consequences from all at

million, quarter million, by Excluding $X were $XX goods million. the by finished materials reduced XX exchange rate in inventories by and raw WIP impacts

improved and Inventory raw finished turns quarter. X.X $XX by quarter, materials year WIP slightly in decreased inventory by million, In in prior to and fourth is $XX $XX the by the from XXXX X.X million goods million.

of XXXX rates. maintenance $XXX the year XXXX million expectations. for close the versus for at year our turns $XX XXXX exchange was entire for We Capital again in million spent good million Inventory $XXX the X.X reduction year spending of down from in were expansion, excluding and cost X.X for prior slightly level business. $XX to million $XX in million

year, current of requirements $XXX in our with markets. expect of tried accordance the we the approximately million CapEx For

taxes $XXX for generated cash operations $XXX We cash to cash in million, $XXX XXXX for including cash million taxes cash from in XXXX of repatriation operations $XX million including cash from million compared repatriation.

-- $XX to $XX for cash including XXXX cash XXXX million cash $XXX cash of of in compared free of cash free year million generation taxes including cash in million, repatriation. last a million taxes XXXX $XXX Generated repatriation for

share to of reliable again that free to as softer, proud that in I'm and reputation economically we yes, excellent cash. every its has I up producer think an and we say can also lift say time

lines the due come by as Lori since years indicated, are on and starts to now many going the steadily resistors. that say product been traditional We it's to they in inductors in chain. negatively to continues report XXXX be impacted separately inventory volume to having profitable. and and resistors Despite and Now, lower highly business I from with corrections supply growing

we down With Sales were industrial, virtually market resistor segments, $X year down versus by position QX medical very XX% $XX rate or prior enjoy prior million by million million quarter resistors auto in the and versus offer by exchange and and excluding impacts. technologies. $XXX all a in by middle we X% strong do or

to XXXX million million exchange X.X sales rate quarter inefficiencies month. year. down $XXX in prior was the volume after to at quarter, temporarily. me quarter of -- to The prior X% in of in X.XX XX% in $XX Sales ratio X.X by X.X and burdening Again, due were from increased backlog margin X.XX excluding in or X.X book-to-bill versus adaptations four came low impacts. slightly results capacity in after excuse -- Gross quarter XX% the were prior

level year for X.X a Gross quarter year at at XXXX, XX% satisfactory at year inventory from in by were margin into the XX% in which turns of other was supported sales turns record on X.X, of built sales for a was hand XXXX full also. the fairly down an the of chain. fourth a level of inventory Inventory good the supply

XXXX, of ASPs price After in development normal returned to trends. the increases

being prior traditional to in We foreseeable X% future, a year. The for to we also correction have profitability X% return levels. prior minus quarter very over business expect inventory versus resistors minus and the versus seen

to inductors. and inductors with business magnetics. The consists inductors of Coming power

market inductors represents general, needs power Exploding leads efficient inductors business in platform of Our one years of some stories success ago fast with the and developed of greatest technically. Vishay for the Vishay. and growing a inductors the robust growing

exchange in inductors up growth Again, With quarter virtually versus magnetics, or headwinds since despite and commented steady prior prior flat rate by I years. out was year, four demonstrating million, prior exchange $XX specialty Sales was businesses versus flat of impact. positioned in $X excluding impacts. sales rate million Year-over-year X% year all quarter in $XXX of million very economic XXXX. versus we're well

was inductors the quarter. quarter QX as at The in sales. prior Book-to-bill quarter. gross X.X excellent X.XX for in were up sales the third from XX% in quite prior months, XX% after margin was of Backlog at same quarter, was of X.XX in which at

also price pressure as and power the quarter, in compared for the minus year. XXXX virtually capacities minus prior expand again future modest for margin manufacturing on in for particular XX% level inductors. X.X to same said and inductors That was Gross in will of continuously, and only quarter year prior sales, X.X% prior versus whole so year. the We is is year. turns the versus X.X% excellent were Inventory quite our the X.X do

Coming to capacitors.

transmission rate excluding position particular, of Our rate a to Asia, million of quarter in below increasing the on business backlogs previous quarter the Year-over-year year by with X% exchange again with European and capacitors XXXX the in Book-to-bill China. opportunities level for months. market capacitor at and below quarter, quarter after impacts. capacitors from $XX prior sales in X.XX high excluding capacitors fourth remained or fourth fields X.XX We niches. was American prior in e-cars $XXX technologies exchange $XXX ratio X.X of for XXXX is decreased X% effects. million were In strong the in in a of range based sales at broad enjoy namely in in XX% power million, and

sales The XX% from unfavorable in and X.X gross mix product lower to gross prior after increased down burdened results as the sales in XXXX the XX% in of was whole margin quarter a compared to temporarily. the quarter, the year. XXXX. XX% volume turns quarter the for in X.X Inventory of margin decreased The year an for XX% to

price For increases versus we had year. prior prior versus X.X% and plus quarter capacitors, X.X%

prior impacts. with in quarter, infrared $XX the Opto as were XX% and receivers, X% sensors consists LEDs of as couplers well -- to quarter automotive Sales emitters, exchange below for with prior rate above excludes Vishay come products line, I business Opto products but million of which year, applications. again

in exchange inventory million was burdened supply believe from we was sales quarter fourth heavily chain. year-over-year products without impacts. with of Opto Year-over-year $XXX XX% X.XX business. the indicating rate in million reductions X.XX the the point $XXX prior by to turnaround by in after down Book-to-bill Opto quarter down went a

Backlog set was quarter, after margin level year high the X.X XXXX at quarter. third Opto came the again Gross quarter. very year. months, compared to percent a a X.X Gross of in a XX% for the XX% of for in months margin the sales record after in the XX% sales of XX% in as prior third

As I said, product line. for a record real this

in compared In high X.X% The the turns of very prior we X.X of Opto, year, to inventory fourth there quarter quarter, the X.X prior as of price have price in prices a vis-a-vis year. the was vis-a-vis whole stable relatively X.X%. reduction a increases

mainly business this broad to as the line supplier Vishay virtually confident commodity all here be and Coming diodes. Diodes sensors. as the in Vishay worldwide. the product remain We we technologies complete represents profitably, also offers to growing most steadily portfolio. for of are segment for largest well

two years, chain. and growing segments keeps profitably and reduction in XXXX volume a position has and record most market industrial strong the supply from automotive the years. business the of in suffered in steadily the After divisions inventory all The the since very diodes in

Sales million of which exclude in diodes exchange below on effects. level prior $XXX of exchange prior $XXX of to decline but Year-over-year a the XX% quarter, decreased $XXX quarter, a impacts. the rate rate XX% million without sales from year, million

we X.X to which of slightly three. of The behind gross quarter XX% reduced in XXXX a XX% from us. appears in gross be quarter. months in still the X.XX in from months The the of ratio X.XX, compared there third have quarter. a in backlogs quarter book-to-bill margin X.X XX% seen the the of the prior The high to was in definitive margin worst quarter level to The was sales of year. prior in at came The on XX% year as at sales in improvement

and the in enormous year. Inventory of level and versus has remained ASP fourth satisfactory maybe for were the in prior level diodes year. and the decline inefficiencies quarter with very The X.X% at the seen reason. prior volume of combination some drop quite accelerated minus decline fourth whole X.X% the turns A strong quarter of ASP a the in on X.X especially I've manufacturing versus quarter minus

that for the future. whenever back have and profitabilities confident business are be in supply this inventory chain We historical will the this foreseeable to would we'll levels also and reached important Vishay, in volumes come normal a

be leader in in Coming developed see form growing of the a product position finally line. continues provide commodity which expected for the Vishay market a future currently to last MOSFET than MOSFET the in a activities but MOSFET over destocking worldwide, years strong some MOSFET. impact this to transistors. of successful one and automotive, Also milder is to other products.

X.XX from business the four in normal. back the was in in million prior Sales below million decreased with the year quarter prior QX. Book-to-bill sales XX% $XXX without quarter way quarter rate million, Year-over-year X.XX after to Apparently and to ratio were MOSFET below X% is exchange XXX without X% impacts. on $XXX rates. by exchange

in sales, at to The prior slight in on at from continue third in in year a compared be months XXXX margin was quarter. the to due to lower Gross volume. Backlogs X.X the the from a XXXX of XX% margin no came gross as XX% high sales, X.X change month quarter. XX% of in level, reduction quarter

and Inventory in prior Price turns X.X% quarter minus versus for the were decline minus year. entire year. prior compared as accelerated, versus to MOSFET quarter has for the X.X X.X% X.X

continue expand automotive to by be to we and of applications, MOSFETs, We capacities. in line we particular are and of be to confident for confident internal foundry this continue driven future the --

was complete summarize. XXXX surprise not XXXX cyclical electronics. which me year in a given the a our Let principally has After of record business of nature entered correction, a massive phase

the is believe that low downtrend that QX are for been business. there point signs clear behind Now orders we us sales our and has of the and

for relatively will are see quarter, recovery The back that still Whereas the will globally to inventory another another is two. encouraging. and automotive expected or time strength, other therefore, market still segment at we get the quarter fees distribution historical some high moderate need to

is Vishay long reason and no term very towards the electronics. growth moves going all mid doubt of benefit broad electrification line a the will supplier forward. to For phase, well established from potential

next enable increased full extent. Our to the capacities participate will us machine the in upturn to

of our and costs implemented expect annual and reduction be an We million announced quarter year fixed of when implementing by personnel first rejuvenation are fully the restructuring the XXXX. program it by will $XX

to first Thank crisis. excludes from $XXX of million of The a the the the gross rapidly you quarter, the evolving much. potential impacts to XX% sales coronavirus we For very midpoint. margin guidance $XXX at at guide of sales range million

please Dr. question. Paul. you take open question. Thank first the We now Regina, call the to

will question from Shawn come Research. first with of the Longbow Harrison Our line

Hi, Chowdhury book-to-bill looking there With good but which -- regard they like for Gausia in Harrison. morning. This is improvement, how there's is good, January? are Shawn on some they looks been look to

early It's approximately year, seem really recovery continue this to in Well, all trends at of point. the but one. the relatively

think you quarter have really worst in seen I four. the

you And inventory much March restocking great. there out in You Okay, then will quarter? need the about how is the beyond an it's any do see come March know, estimate quarter? even for if occurring

inventories interesting the distribution continues. distribution, question, worked needs inventories. million, XX, orders product approximately, quarter still guess year, high the sharply in in down which but obviously relatively distribution, course would the be yes, that fourth from a I these XX relatively despite high Ironically, it high was having really no to just and too see despite the because will of increased

of think me. diodes, actually it do in quickly capacitors was Okay, How took down And back margin weak I would Any color course the then Gross in another and one last be down Thank for just appreciated. come just those diodes. XXXX? you. step particularly the for and great.

the be burdened for get singularities by the problem themselves really secondly, us say to four, way. just we the tried behind not in on for repeat And levels getting I Yes, and to confident for back will was one. quarter as are historical by quarter quite sure, instance which not volume some to

Your the Bank line from next of Bhattacharya of question with will come Ruplu America.

a Paul XXX my a than higher guidance gross first for you you thank typically a your morning slightly has quarter range margins guide Good the is for for bps. of instead questions. what taking Dr which

it's think bps. I XXX like

causing those of margins of quarter. were first of is You that fourth higher in that are said in items the quarter? continuing some the the things are gross gross Why there one-time some margins? there, that some range what Are impacted

the First it's I think of all, range. same

and we $XX plus have sales XX% in both million have, resulted gross always in minus margin. We

yes, absolutely, -- maybe. previous quarter, are deviation the will So But singularities we very and from first confident. quarter I very don't see again, itself most specific. of fourth was them them, the very, not repeat in away the a Will was it's, go quarters of from most

not happen in has and confident the number first we happened can we this these cases what So quite a are again will of pinpoint quarter. really that a

think ASPs as fine. the -- I -- A gross for for you But quarter anyway, better? will thanks you I one on segment XXX basis was range. margins thing points you typically XX% guide Okay, in in whereas there's minus ASPs pressured quarter. My points, that on saying you the range the first overall? you you on because XX the comment were Do as that's Do that like, diodes, mean fourth well you're mentioned that. that's, said the ASPs basis that on think be see improving plus a

the historically price is we decline think -- is two not X% practically price of. are no offset X.X% And always who of diodes per enter we believe a is range price phase little more X% year for it enjoy by of typical no a diodes all which into same for XX% the but will question decline innovation. years I kind restart like I reduction and or that historical decline. normal able the price very but this diodes, to this of has me the cost in decline, for

given versus And your one you of economic use for your -- priorities buybacks me, the on any environment what environment, last the are thoughts paying can cash in versus just, down from the acquisitions. debt if of terms versus

your on give us Thank can -- you as If you. well. that on thoughts

Yes.

other the we have to hand, As And dividends for on and the so, continuously are a may matter at raised of speak. substantially last XX% looking year. believe, XX% substantially acquisitions I we we so successful doing up. fact, be moment, we And was

is interest at moment. of center the this the -- these, So our the

Your from Karl Cowen. the next question of with line Ackerman comes

may. questions, and appreciate if Hey, thanks. Lori Dr Paul two Thanks, the I

of environment. competitive just on kind First question on the is

do to consolidation your for view capacitor a are thing resistors peers, provider industrial as bad you think, it become being as competitor, consolidated. a regard Taiwanese some capacitors, So you Do a a Or I in thing? pricing? in a Given an the process good to of with industry formidable of combined the US have I And seem view more would bit and inductors? follow-up.

in impact and our development, purchasing cases, this in in Vishay us, business. absolutely but businesses practically absolutely case, maybe capacitors we particular, departments customers, no in the this in not it's a good not imagine Could concentration all harmless has consequence this are capacitors of the for absolutely for niche for no but because in especially has for is exclusively this the this that

Appreciate seems that. clients pricing pricing with historical in line With to more it regard rates. are

impact? outlook global from volcano perceived Philippines an in pricing components does March improvement have the However quarter the electronics is mean imply chain? I in passive that an your following to supply

Yes.

was back on decline think specialty our low but we of really, only the all the capacitors share in historically the very not because products in priced Philippines passives. all passives, normal high in always are I of to

have the MOSFETs. and course products in have true and More it's commodity I the since this case things diodes decline this we getting in price the very quite we And would effect of believe MOSFETs. X% starting why in no trend, quarter, of not for reason which heavy which diodes normal. seen up X% say is about believe seen in there's this is a is I is fourth which years, predominantly for critical end

we anyway whether term, would we X% do diodes, I said, with back. more for X% that. little old but will one that come cost have to point, But cost can will confident little long on cope reduction that reduction so approximately a quite a in going say maybe as be believe come this which this have we efforts is, for or the quarter later, I'm trend, exactly MOSFETs that I

the Your from line question comes next of Matt Sheerin Stifel. with

And just morning, Dr. Paul. question good Thank you. a

across plays bottom QX turn big you we obviously like, to out starting revenue you markets 'XX? Vishay year, year-over-year as as to do is of particularly and look for certainly be past here demand a your But at end possible of said, you sounds able Looking in think the grow end end question. the are it's cycle to how and it the the Calendar

Absolutely, believe but I I don't that directly, that the -- a to nature year, growing it are know. also economic manufacturing, can extent because you yet, believe what not you by not Chinese currently I recovery, the additional see will we so -- knows will it which had really bringing good will economy hit XXXX and we we down in year, development, costs reoccur. We may which never what, be nobody say which know means a in the perfect be in depends

be course have So moment I depends which better am sales, at confident of whether we in the on can is to forecast. see the environment,

shutdowns your extended to seen to Yeah. don't your what have on But in own supply And of you're granularity from your that? chain. China the just respond or talk in business manufacturing from appreciate the about what you or impact lot of revenue doing derived could that? that a have is facilities terms coronavirus production you percentage of your And you

it's comes the, part are in in some First the passive of is also the semiconductors, the a from of the diodes for inductors, a particular there MOSFET. share, side, the the in also lines, in bulk business in all, the especially There nice but the most Really, that but share. like, semiconductors. factories is Chinese in but

shut again is that both that hands yes, but are it. a a of in prediction we come reopened in the is -- officials, China, high is next down, course the no this it are be currently and will the the about out can believe we of assumption concerning This are I share of question cases the think. this So shutdown that plants our week. But

gotten And issue Is extended? facilities indeed if is able is you've I in this up Europe. slack are that something the will extended, know pick other be shutdowns to that if -- that, MOSFET facilities the

take we the same. Well, don't

We worldwide extent. a all have our capacity in cases utilized to large

I the is least this through the Some knows on what in back exactly but, But mitigation way -- I normal. to especially plants, full can at to Nobody that, they're the believe Taiwan, they're that know. happen signs many China, extent. not

that that And Okay. COGS question OpEx that a out expect that or SG&A to regarding take item? incremental in million is Lori, year. is next costs or an beginning a in $XX you just mix? Or

in expenses. the leave full -- of XXXX only we and about many cost late back that volunteers full again, the because operating of So it's reminds the sold the and And XX/XX between of goods the you, year. QX in quite anticipate impact

it. Got

much. Thanks Okay. very

with next of line Instruction] Paribas. Exane Your [Operator question from O'Connor the David will come BNP

be Could from on, $XX about back questions. two of to get million we normal Just first wondering, morning. question. to bottom and into Paul, to for Good orders appears my firstly Dr. Great. side. taking million your one. Thanks my $XX Maybe talk to a from come January to can get back inventory? QX my we seasonality? type you with QX That's out still the above can

Lori. that you're And CapEx, out? areas that And and or within intend CapEx -- for split XXXX you that things -- to expansion The of the then you capacity and also the the a on question maybe Thanks. side in? can what investing spend

in change quarter. at inventory I the Well, story, do future, last in we looking what not to said we -- the think have

We to second have get of quarter. I want expected we but and what said to really things the the development normal even in last hide at of maybe to course behind mid of course, I after reconfirm that. said don't it, we that, the I year, on the it But time want the think, Chinese say quarter. depends must the

an the We expect mid by to things inventory standpoint of normal in year. be the from pipeline

for way, And for -- the from me, a approximately year, say year. CapEx I'll standpoint like split next be the that the it'll the that of split for the this one one

you. thank Understood,

further time, have no And questions. we at the

call. you. conference interest Intertechnology. Thank in our quarter concludes fourth for Thank This Vishay you

today's call. and all may this Thank gentlemen, you conclude you joining. disconnect. Ladies does now for And